​EBay, LVMH reach settlement over fake goods

EBay (EBAY) became wildly popular in its early years as a place where customers could find cheap brand-name products, such as Louis Vuitton bags and Tiffany jewelry. The only problem was those prices were often too good to be true, leading to claims from luxury purveyors that counterfeit products were being sold.

Now, one of the longest-standing headaches for the online auction giant has been put to rest, with luxury fashion company LVMH -- which owns brands including Louis Vuitton and Donna Karan -- and eBay settling ongoing litigation.

The two sides didn't disclose financial terms of the agreement, but said the companies have agreed to a "cooperative effort to protect intellectual property rights and combat counterfeits in online commerce."

LVMH sued eBay in 2008, arguing that 90 percent of designer items sold on the auction site were fakes. While LVMH initially prevailed in that lawsuit, a later ruling said a lower court didn't have jurisdiction over eBay's U.S. website.

"Thanks to our joint efforts, consumers will enjoy a safer digital environment globally," Michael Jacobson, senior vice-president and general counsel at eBay, and Pierre Godé, vice- president at LVMH, said in a statement.

While luxury brands such as LVMH argue that they lose millions in potential sales when counterfeits are marketed to unsuspecting buyers, eBay had earlier said that it didn't want to keep people from reselling used items, such as old Louis Vuitton bags.